3. (TCO I) Under the cash method of tax accounting, tax deductions are generally taken when: (Points : 5)| payment is made.
the liability arises.
there is net income to absorb the expense.
None of the above|

4. (TCO A) Which of the following constitutes tax evasion? (Points : 5)| Arranging your affairs to keep your tax liability as low as possible under the tax law Failing to disclose a tax liability from a completed transaction Trying to maximize profits

Trying to minimize your tax liability.|

5. (TCO C) Which of the following items is subject to federal income tax? (Points : 5)| Interest on U.S. Treasury bonds
Gambling winnings
Interest on loans made in the ordinary course of business All of the above|

6. (TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift, but Sam is insolvent. Which of the following statements is correct concerning the impact of this transaction? (Points : 5)| Both Bob and Sam recognize $8,000 of taxable income. Bob recognizes $8,000 of taxable income.

Sam recognizes $8,000 of taxable income.
Neither Bob nor Sam has any taxable income from this transaction.|

7. (TCO I) David, a cash basis taxpayer, owns two rental properties. Based on the following information, compute the amount that he must include in his 2012 gross rental income.

YOU MAY ALSO FIND THESE DOCUMENTS HELPFUL

...﻿Memo
To: John and Jane Smith
From:
Date: 10/9/14
Re: Memo summarizing various tax issues
1. John Smith's Tax Issues
Issue (a): How is the $300,000 treated for purposes of federal tax income?
The $300,000 that John received from the court case is considered earned income for the year. The $300,000 is earned income for John Smith and will be reported as gross income either on Schedule C of the individual return or as gross income on the LLC return.
Applicable Law and Analysis...

...TCO 1) What is the purpose behind the five primary activities in the value chain?
First, info flow diagrams and flowcharts argon the two most much utilize development and musical accompaniment tools employ today. Second, since systems developme nt is super complex, DFDs and flowcharts ar! e tools that are used to fix order from sanatorium and complexity.Â (Ch 3, p. 50)| | | Â | Points Received:| 4 of 5| Â | Comments:| First, data flow diagrams and flowcharts are the two most frequently used...

...Question Type: # Of Questions: # Correct:
Multiple Choice 5 4
Many Multiple Choice 1 1
Matching 1 1
Essay 1 N/A
Grade Details - All Questions
1. Question :
(TCO 3) You have been approved for a $70,000 loan toward the purchase of a new home at 12% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly.
Student Answer: $2613
CORRECT $8690
$5740
None of the above
Instructor Explanation:...

...1. Question:
(TCOs 1, 2, and 3) Ted is the sole shareholder of a C corporation, and Sue owns a sole proprietorship. Both businesses were started in 2010, and each business sustained a $5,000 net capital loss for the year. Which of the following statements is correct?
Your Answer:
Ted’s corporation can deduct the $5,000 capital loss in 2010.
Ted’s corporation can deduct $3,000 of the capital loss in 2010.
Sue can carry the capital loss...